1108 Exec Digest.IR 2b

 

Build Energy America
 
There are clear signs the nation is underinvesting in the backbone energy infrastructure, particularly the baseload power generation fleet. Ignoring the advanced age of its vital nuclear and coal components, we have been building only a trickle of new state-of-the-art baseload plants. If the nation does not resume prudently modernizing the baseload fleet soon, the timely retirement of the oldest nuclear and coal plants will be impractical.
 
Only 44 baseload plants are under construction in the continental U.S. If all 44 projects are completed, which is hardly certain, they would add no more than 24,000 MW of baseload generating capacity. At this rate, the baseload fleet would not be modernized for some 68 years, not until the year 2079. This rate is more alarming when other factors are taken into account, such as demand growth for power, expiring licenses of the oldest nuclear plants and air emissions of the oldest coal plants. Consistent with this trend, only 18 baseload plants were completed during the January 2010 through February 2011, adding just 13,000 MW.
 
In 15 of the 48 continental U.S. states and the District of Columbia, no baseload plants have been completed since January 2010 and none are under construction. Texas and North Carolina alone account for one-quarter of all the new capacity.
 
This disturbing situation is unsurprising because a proposal to construct a baseload plant typically must navigate multiple regulatory processes, each of which can be leveraged by opponents to run up the development time, costs and risks and sully the reputation of the proposing utility or energy company. The regulatory culture of many states makes it too easy for intractable opponents to mire and string out a process as regulators strive for consensus and shun decisions that would outrage opponents.
 
Fortunately, the problem is eminently fixable. The culture of inaction generally is not embedded in regulatory law, having only evolved as a norm in regulation since the divisive nuclear prudence cases of the 1980s in many but not all states. States can make their regulatory proceedings fact-based and timely as they were until the 1980s and as they are in states such as Texas and North Carolina, enabling prudent baseload modernization.
 
States with the best practices in regulating baseload modernization balance the needs of opponents and utilities and energy companies. Regulators are empowered to act definitively on proposals confident that fulfilling their responsibilities will be accepted civilly by proposing companies and opponents alike, regardless of which way the decision goes. Other best practices can be decisive in attracting energy investment to states such as Texas and North Carolina, the most important of which is a political and regulatory leadership with a strong appreciation for the need to prudently modernize the baseload fleet and an even perspective about utility rates.
 

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1108 Exec Digest.IR 2b

 

Build Energy America
 
There are clear signs the nation is underinvesting in the backbone energy infrastructure, particularly the baseload power generation fleet. Ignoring the advanced age of its vital nuclear and coal components, we have been building only a trickle of new state-of-the-art baseload plants. If the nation does not resume prudently modernizing the baseload fleet soon, the timely retirement of the oldest nuclear and coal plants will be impractical.
 
Only 44 baseload plants are under construction in the continental U.S. If all 44 projects are completed, which is hardly certain, they would add no more than 24,000 MW of baseload generating capacity. At this rate, the baseload fleet would not be modernized for some 68 years, not until the year 2079. This rate is more alarming when other factors are taken into account, such as demand growth for power, expiring licenses of the oldest nuclear plants and air emissions of the oldest coal plants. Consistent with this trend, only 18 baseload plants were completed during the January 2010 through February 2011, adding just 13,000 MW.
 
In 15 of the 48 continental U.S. states and the District of Columbia, no baseload plants have been completed since January 2010 and none are under construction. Texas and North Carolina alone account for one-quarter of all the new capacity.
 
This disturbing situation is unsurprising because a proposal to construct a baseload plant typically must navigate multiple regulatory processes, each of which can be leveraged by opponents to run up the development time, costs and risks and sully the reputation of the proposing utility or energy company. The regulatory culture of many states makes it too easy for intractable opponents to mire and string out a process as regulators strive for consensus and shun decisions that would outrage opponents.
 
Fortunately, the problem is eminently fixable. The culture of inaction generally is not embedded in regulatory law, having only evolved as a norm in regulation since the divisive nuclear prudence cases of the 1980s in many but not all states. States can make their regulatory proceedings fact-based and timely as they were until the 1980s and as they are in states such as Texas and North Carolina, enabling prudent baseload modernization.
 
States with the best practices in regulating baseload modernization balance the needs of opponents and utilities and energy companies. Regulators are empowered to act definitively on proposals confident that fulfilling their responsibilities will be accepted civilly by proposing companies and opponents alike, regardless of which way the decision goes. Other best practices can be decisive in attracting energy investment to states such as Texas and North Carolina, the most important of which is a political and regulatory leadership with a strong appreciation for the need to prudently modernize the baseload fleet and an even perspective about utility rates.